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USDA Yield estimates could impact grain basis

A market analyst says he’s closely watching USDA’s corn and soybean yield estimates in this week’s supply and demand report.

Jim McCormick with AgMarket.Net says the biggest impact could be to local basis levels. “If you keep that yield closer to 180 on the higher end of the trade estimate, you’re still looking at one of the largest corn crops ever. Leaving the bean yield unchanged would leave us the biggest bean crop ever. The carry number is still pretty stout based on the big crop from a year ago.”

He tells Brownfield that could contribute to on-farm storage capacity issues. “On average, I’m hearing roughly 20 to 25 percent of this year’s crop has been marketed. It’s ahead of last year’s pace, but prices are a lot better this time than they were a year ago. Even with that roughly 25 percent forward sold, we still have 75 percent unsold, and we can’t store all of that on farm so some of that grain is going to go to market.”   

McCormick says the USDA could also make further adjustments to acreage and demand usage.

The supply and demand report is out Friday at 12 pm ET/11 am CT.

Jim McCormick: